Problem
Territory and Product Profitability Analysis
Zen Skateboards, Inc., manufactures and sells two styles of skateboards, Street Machine and Winter Warrior. These skateboards are sold in two regions, Southern Coast and Northern Coast. Information about the two skateboards is as follows:
|
Street Machine
|
Winter Warrior
|
|
Sales price
|
$450
|
|
$350
|
|
|
Variable cost of goods sold per unit
|
167
|
|
161
|
|
|
Manufacturing margin per unit
|
$283
|
|
$189
|
|
|
Variable selling expense per unit
|
166
|
|
112
|
|
|
Contribution margin per unit
|
$117
|
|
$77
|
|
The sales unit volume for the territories and products for the period is as follows:
|
Southern Coast
|
Northern Coast
|
|
Street Machine
|
2,560
|
|
1,280
|
|
|
Winter Warrior
|
0
|
|
1,280
|
|
Prepare a contribution margin by sales territory report. Calculate the contribution margin ratio for each territory as a whole percent, rounded to two decimal places, if required.